Do-Wop Corp. v. City of Rahway

• Decision Date: 29 June 2001
• Citation: 773 A.2d 706,168 N.J. 191
• Parties: DO-WOP CORP., t/a Razzle Dazzle Fantasy Runway, Plaintiff-Respondent, v. CITY OF RAHWAY, Defendant-Appellant.
• Court: New Jersey Supreme Court

773 A.2d 706

168 N.J. 191

DO-WOP CORP., t/a Razzle Dazzle Fantasy Runway, Plaintiff-Respondent, v. CITY OF RAHWAY, Defendant-Appellant.

Supreme Court of New Jersey.

Argued March 27, 2001.

Decided June 29, 2001.

Louis N. Rainone, Middletown, argued the cause for appellant (DeCotiis, Fitzpatrick, Gluck, Hayden & Cole, attorneys; Mr. Rainone and Anthony C. DeFelice, on the brief).

Stephen E. Milazzo, Hackensack, argued the cause for respondent (Milazzo, Fortunato, McCann & Murray, attorneys).

The opinion of the Court was delivered by

COLEMAN, J.

This case involves licensing provisions of the Code of the City of Rahway. Pursuant to that Code, individuals and commercial establishments that operate adult-oriented businesses are required to obtain annual licenses. The critical issue raised in this appeal is whether a statute that changed plaintiff's sexually-oriented business from a licensed conforming use to a nonconforming use has been "grandfathered" by virtue of the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-68. The trial court and the Appellate Division concluded that plaintiff is protected by the MLUL. We disagree and reverse.

I.

Plaintiff, Do Wop Corporation, trading as Razzle Dazzle Fantasy Runway (Do Wop), and its predecessor, commenced operating an adult entertainment establishment on Route 1 in Rahway in March 1991 after obtaining the required licenses. Do Wop became the operator in May 1993. Do Wop's business consists of "dancing meant for adult entertainment, sales of adult books and videos, and [the] operation of [an] adult amusement center."

When plaintiff's predecessor opened the business in 1991, the Rahway Code did not impose on it minimum distance requirements with respect to other adult entertainment centers, schools, places of worship, or residential neighborhoods. That changed before Do Wop's 1993 license expired on December 31, 1993.

On August 23, 1993, Rahway passed Ordinances A-44-93 and A-45-93. Ordinance A-44-93 amended Chapter 72-6, Article II of the Code of the City of Rahway to add:

D) No application shall be approved if the property where the proposed activity is for the purposes of exhibiting nudity for entertainment or amusement purposes, establishing an Adult Entertainment Center, or establishing an Adult-only Books/Video Store, and is located within 1000 feet of any such adult entertainment or amusement use or within 1000 feet of any residential zone, church, designated public park, playground, and/or recreation facility, public institution or other public place and/or public school, and/or school bus stop. Such activity shall only be permitted in the I-1 Industrial Zone.

E) Amortization of nonconforming uses. As to those establishments which are operating as of the date of passage of this Ordinance, they shall become unlawful two years following the passage of the Ordinance.

[Rahway, N.J., Code ch. 72-6, art. II (1993).]

Similarly, Ordinance A-45-93 amended Chapter 73-3(g) of the Code of the City of Rahway to read:

G) No application shall be approved if the property where the proposed activity is for the purposes of an Adult Amusement Center, games or devices and is located within 1000 feet of any other such Adult Entertainment or Amusement Center or within 1000 feet of any residential zone, church, designated public park, playground and/or recreation facility, public institution or other public place and/or public school, and/or school bus stop. Such activity shall only be permitted in the I-1 Industrial Zone.

[Rahway, N.J., Code ch. 73-3 (1993).]

Do-Wop's applications for renewal of its licenses for the years 1994 and 1995 were approved based on the two-year "amortization" provision contained in Ordinance A-44-93. By early 1994, two bills were introduced in the State Legislature that addressed many of the same concerns that had been addressed in Rahway's ordinances, including the need to reduce the number of sexually-oriented businesses. G.A. 252, 206th Leg., 2d Sess. (1995); G.A. 842, 206th Leg., 2d Sess. (1995). Both bills were enacted into law and became effective on September 15, 1995. L. 1995, c. 230, § 3 (codified at N.J.S.A. 2C:34-7 and amending N.J.S.A. 2C:34-2). In language similar to the pertinent language in the Rahway Code, N.J.S.A. 2C:34-7 provides in pertinent part:

Except as provided in a municipal zoning ordinance adopted pursuant to [N.J.S.A.] 2C:34-2, no person shall operate a sexually oriented business within 1,000 feet of any existing sexually oriented business, or any church, synagogue, temple or other place of public worship, or any elementary or secondary school or any school bus stop, or any municipal or county playground or place of public resort and recreation, or any hospital or any child care center, or within 1,000 feet of any area zoned for residential use.

[N.J.S.A. 2C:34-7a.]

The same legislation also amended N.J.S.A. 2C:34-2 to make clear that the enactment of N.J.S.A. 2C:34-7 did not change the existing obscenity law codified at N.J.S.A. 2C:34-2. L. 1995, c. 230, § 1.

The significance of N.J.S.A. 2C:34-7 is that it makes unlawful the operation of sexually-oriented businesses within the 1,000 foot buffer zones unless the municipality in which such a business is located has, through a zoning ordinance, permitted that operation within one or more of the buffer zones. Here, it is undisputed that Do Wop's facility is located within one of the buffer zones within 1,000 feet of a residential zone. It is also undisputed that Rahway has not enacted a zoning ordinance pursuant to N.J.S.A. 2C:34-2b and N.J.S.A. 2C:34-7a legalizing sexually-oriented businesses within the buffer zones.

Do-Wop hand-delivered a timely application to Rahway on December 27, 1995 for renewal of its licenses for theaters, indoor performances, and amusements for 1996. On the same day, Rahway advised Do Wop's attorney that the renewal application had been rejected based on Chapter 72-6 of the Rahway Code because the twoyear amortization period for non-compliant uses had expired. The letter further stated that continued operation would be in violation of the Code. In response to that letter, Do Wop instituted the present litigation on January 17, 1996 seeking, among other things, a declaratory judgment that the 1993 ordinances violated the MLUL, and an order compelling Rahway to process its license-renewal application. Rahway filed a counterclaim, seeking to enforce the 1993 amendments to its Code and N.J.S.A. 2C:34-7a.

The trial court conducted a summary proceeding on January 28, 1998 and concluded that the applicable provisions of the Rahway Code were invalid because they constituted an improper exercise of zoning power that did not adhere to the requirements of the MLUL. The trial court directed Do Wop to file its applications for renewal of its licenses for 1996, 1997, and 1998 within ten days. The court's decision was memorialized by an order dated June 23, 1998. After proper renewal applications were not filed by Do Wop within a year of the January 1998 proceeding, the June 1998 order was effectively amended by an order dated March 26, 1999, which required Do Wop to file "properly executed applications in the form supplied by the Rahway City clerk." That order also required each stockholder to be fully identified and fingerprinted. Again, Do Wop was given ten days to file proper renewal applications. When Do Wop failed to comply, the trial court issued an order on April 16, 1999 compelling Do Wop to cease operating its business.

Rahway appealed the June 23, 1998 order and Do Wop appealed the April 16, 1999 order. Both appeals were consolidated for disposition. The thrust of Do Wop's appeal was a challenge to the validity of the fingerprinting and disclosure requirements of the renewal applications. In an unpublished opinion, the Appellate Division affirmed the June 23, 1998 order substantially for the reasons expressed by the trial court. The Appellate Division reversed the April 16, 1999 order that enjoined Do Wop from operating its business because the trial court had not addressed the constitutional challenge to the fingerprinting and disclosure requirements. Those issues were remanded to the Law Division to be litigated. We granted Rahway's petition for certification, 165 N.J. 604, 762 A.2d 219 (2000), and now reverse.

II.

A.

The issues in this appeal have been framed by Do-Wop's assertions that the Rahway Ordinances, A-44-93 and A-45-93, are zoning ordinances because they pertain to the location of sexually-oriented commercial establishments. According to Do Wop, the ordinances converted its business from a permitted use in the zone to a nonconforming use for two years and an illegal use thereafter. It maintains that those ordinances violated the MLUL in two respects. First, Do Wop asserts that the ordinances violate the MLUL's nonconforming use provision, N.J.S.A. 40:55D-68, which allows nonconforming uses to continue indefinitely after a use has been made nonconforming because of an amendment to the zoning ordinance. Second, Do Wop contends that even if the ordinances are valid, they were promulgated in violation of the procedural requirements of the MLUL. The trial court and the Appellate Division found Do Wop's arguments to be persuasive and ruled in its favor.

Rahway, on the other hand, takes an entirely different approach. Rahway's primary contention is that Do Wop's operation became an illegal establishment after September 15, 1995, when N.J.S.A. 2C:34-7 became effective, because that statute trumps the nonconforming use protection found in the MLUL, N.J.S.A. 40:55D-68. According to Rahway, N.J.S.A. 2C:34-7 prohibits Do Wop's operation because it is located within the 1,000 foot buffer zones and because no Rahway zoning ordinance authorizes such businesses within the buffer zones. Thus, Rahway contends that it properly denied Do-Wop's 1996 licenserenewal application in December 1995, and that neither N.J.S.A. 2C:34-7 nor Rahway's...